JAKARTA (TheInsiderStories) – The operator of low cost carrier, PT AirAsia Indonesia Tbk (IDX: CMPP) together with the AirAsia Group are continuing negotiations with the lessor for the postponement of the lease payment, the company said on Thursday (03/12). The lease debt amounting to Rp307 billion (US$21.77 million), most of the debt owed to the third parties.
The negotiations were carried out as an effort to reduce aircraft capacity during the pandemic so that the company can focus on passenger services. The management said, to maintain the cash flow by renegotiating and delaying payments to vendors, especially aircraft lessors, fuel vendors, and airport operations vendors.
AirAsia Indonesia said that until now the airliners operates one aircraft and 27 charter aircraft. Until September, the utilization rate of all these aircraft was still low because the company had only operated five fleets. Not only hit by liabilities the COVID-19 outbreak also hit the company’ revenues and its net profit.
The operator posted net revenues of Rp1.40 trillion in the first nine months of this year, fell by 71 percent from a year ago of Rp4.83 trillion. At the same period, the aviation firm booked a net loss of Rp1.71 trillion from 2019 profit of Rp422.05 million.
While, AirAsia Indonesia‘ liabilities jumped 3.6 times since the beginning of the year to Rp8.67 trillion, due to a surge in short and long-term finance lease obligations to a total of Rp4.87 trillion from previously Rp172 billion. Its short-term trade payables also nearly doubled to Rp1.02 trillion and other related party debts soared to Rp1.05 trillion from initially Rp94.18 billion.
In the first half of 2020, the issuer reported total passengers fell by 99.8 percent to 4,059 sitter. As a group, Malaysia’ AirAsia Bhd’ passenger number occupants and seat capacity also dropped by 98 percent in the same period to 204,082 in the same period.
The load factor of the group (Indonesia, Malaysia, Thailand, Philippines, and India) also fell to 59 percent and number of flights fell 98 percent to 1,868. During the pandemic, the issuer rely on essential movement of people and cargo, some of which had longer distance, contributing to a 3 percent increase in average stage length.
AirAsia Indonesia resumed operations on 19 June with five routes. At the end of July, the daily sales have reached five times of the daily sales recorded in early June, evidently showing signs of demand recovery. This year, said the President Director, Dendy Kurniawan, stated, since April 1, the flight carrier suspended all domestic and international flights to help prevent the spread of the outbreak.
Currently, the AirAsia Indonesia together with 29 issuers have not submitted the 2019′ financial report to the Indonesia Stock Exchange together. Based on the regulation, the 30 companies will be subject to a fine of Rp150 million.
The group gradually resumed operations at end-April as domestic travel restrictions eased. The issuer saw a pick up in key operational metrics in June as compared to May. AirAsia Malaysia doubled up capacity in June compared to May, as the Malaysian government began allowing interstate travel from June 10.
The unit achieved a 65 percent load factor while carrying 118,407 passengers in June, having reopened 24 routes by month’ end. The company expects to recover up to 70 percent of its pre-COVID-19 domestic capacity by 4Q of 2020. While, AirAsia Philippines registered a 99 percent decline in number of passengers carried as the airline entity hibernated its fleet from March 20 to June 4.
The subsidiary boasted 19 percent of capacity market and ended the quarter with the resumption of 6 routes. For the 4Q of this year, the flight carrier is targeting a recovery of domestic capacity up to 60 percent of pre-COVID-19 levels. Then, in May 2020, AirAsia Thailand reinstated domestic flights in phases as lockdown measures were partially uplifted, but with social distancing measures implemented on-board as required by the authorities, before the measures were eased in mid-June.
With the encouraging rebound traffic, the unit operated 18 percent of pre-COVID-19 capacity in June 2020, which more than doubled the May 2020 capacity. The airliners resumed service to 18 of its domestic destinations in 2Q of 2020, topping peers with a leading capacity market share of 33 percent. In 3Q and 4Q of this year, AirAsia Thailand expects to operate 75 and 95 percent of pre-COVID-19 domestic capacity respectively.
Furthermore, AirAsia India restarted its domestic operations on May 25, and was quick to ramp up to 30 percent of pre-COVID-19 capacity in June, with 36 operational routes. The Group is optimistic over the subsidiary’ performance and is looking at domestic capacity resumption of 55 percent for 3Q and 80 percent for 4Q out of last year’s operations.
And, AirAsia Japan reported a decline of 98 percent in passengers carried with 4 percent operating capacity in 2Q of 2020, as flights were not restarted due to guidelines set by the government. AirAsia Japan resumed operations on August 1, 2020.
Written by Editorial Staff, Email: email@example.com